FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
(As last amended by 34-31905, eff. 4/26/93)
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period.........to.........
Commission file number 0-15758
JACQUES-MILLER INCOME FUND, L.P. II
(Name of small business issuer in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
102 Woodmont Boulevard, Suite 420
Nashville, Tennessee 37205
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interest
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $37,000
State the aggregate market value of the voting partnership interests by non-
affiliates computed by reference to the price at which the partnership interests
were sold, or the average bid and asked prices of such partnership interests, as
of December 31, 1997. Market value information is not available. Should a
trading market develop for these interests, it is the General Partner's belief
that the aggregate market value of the voting partnership interests would not
exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Prospectus of Registrant dated October 16, 1985 (included in
Registration Statement, No.2-99745, of Registrant) are incorporated by
reference into Parts I and III.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Jacques-Miller Income Fund L.P. II ("Registrant" or "Partnership") is a Delaware
limited partnership formed in July 1985 for the purpose of making first mortgage
loans, wrap-around mortgage loans and other loans secured directly or indirectly
by interests in real property substantially all of which may be made to
affiliated public and private real estate limited partnerships. The Registrant
has made loans providing, generally, for repayment of principal between 8 and 15
years after funding.
The offering of the Registrant's limited partnership interests (the "Interests")
terminated on October 15, 1987. The Registrant received gross proceeds from the
offering of approximately $12,390,000 and net proceeds of approximately
$11,200,000.
See "Item 6. Management's Discussion and Analysis or Plan of Operation" for more
information.
Mansion Hill Apartments in Chattanooga, Tennessee, and Kingswood North
Apartments in Norcross, Georgia, were acquired during 1990 through foreclosure
proceedings. During 1991, these properties were sold. During 1991, the
Registrant acquired La Plaza Apartments ("La Plaza") through similar foreclosure
proceedings and during 1992, Willow Oaks Apartments ("Willow Oaks") and Brighton
Way Apartments ("Brighton Way") were foreclosed upon by separate limited
partnerships of which the Registrant is the sole limited partner. On February
1, 1993, Brighton Way was sold, and on January 17, 1995, Willow Oaks was sold.
Also, on May 24, 1996, La Plaza was sold.
Effective June 30, 1989, Jacques-Miller, Inc. sold the economic benefits and
economic rights in Jacques-Miller sponsored limited partnerships, including the
Registrant, to Balanced Holdings Partners, L.P., an affiliate. Effective
December 31, 1991, MAE GP Corporation ("MAE GP") an affiliate of Insignia
Financial Group, Inc. ("Insignia") of Greenville, South Carolina acquired
substantially all of the assets of Jacques-Miller, Inc.; however, such assets
purchased do not include the General Partner Interest of the Registrant.
The Registrant has no employees. Management and administrative services are
performed by Insignia Residential Group, L.P., an affiliate of Insignia,
pursuant to management and administrative agreements.
ITEM 2. DESCRIPTION OF PROPERTIES
As of May 24, 1996, the Partnership no longer owns any investments in real
estate due to the sale of its final investment property, La Plaza. The
Partnership received net proceeds of approximately $927,000 after payment of
closing costs. This disposition resulted in a gain of approximately $1,348,000
and a loss on early extinguishment of debt of approximately $221,000 due to the
write-off of unamortized loan costs and mortgage discount for the year ended
December 31, 1996.
See "Note C" of the financial statements included in "Item 7." for a further
description of the sale.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not aware of any pending or outstanding litigation that is
not of a routine nature. The General Partner believes that all such matters are
adequately covered by insurance and will be resolved without a material effect
upon the business, financial condition, statements of operations or liquidity of
the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant did not submit any matter to a vote of its security holders
during the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR PARTNERSHIP EQUITY AND RELATED PARTNER MATTERS
There is no established market for the Units and it is not anticipated that any
will develop in the foreseeable future. As of December 31, 1997, there were
1,218 holders of record owning an aggregate of 12,400 Units.
Pursuant to the terms of the Partnership Agreement, there are restrictions on
the ability of the Limited Partners to transfer their Units. In all cases the
General Partner must consent to any transfer.
The Revenue Act of 1987 contained provisions which have an adverse impact on
investors in "publicly traded partnerships". Accordingly, the General Partner
has established a policy of imposing limited restrictions on the transferability
of the Units in secondary market transactions. Implementation of this policy
should prevent a public trading market from developing and may impact the
ability of an investor to liquidate his investment quickly. It is expected that
such policy will remain in effect until such time, if ever, as further
clarification of the Revenue Act of 1987 may permit the Registrant to lessen the
scope of the restrictions.
No cash distributions were paid during the year ended December 31, 1997. During
1996, the Partnership distributed approximately $917,000 to the limited partners
and approximately $9,000 to the general partner due to the sale of La Plaza.
There are no material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of the
Registrant's Partnership Agreement.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership's net loss for the year ended December 31, 1997 was
approximately $16,000 compared to net income of approximately $1,213,000 for the
year ended December 31, 1996. The decrease in net income is directly
attributable to the sale of La Plaza, the sole operating real estate asset on
May 24, 1996. The Partnership currently holds five notes which require payments
from excess cash flow (see discussion below).
Liquidity and Capital Resources
At December 31, 1997, the Partnership held cash and cash equivalents of
approximately $789,000 compared to approximately $736,000 at December 31, 1996.
The net increase in cash and cash equivalents for the years ended December 31,
1997 and 1996 is approximately $53,000 and $150,000, respectively. Net cash
provided by operating and investing activities and used in financing activities
decreased due to the sale of La Plaza, the sole operating real estate asset of
the Partnership on May 24, 1996.
On May 24, 1996, Jacques-Miller Income Fund II Special Asset Partnership (La
Plaza) L.P., which is 99.9% owned by the Partnership, sold La Plaza Apartments,
located in Altamonte Springs, Florida, to an unaffiliated purchaser, Wymore
Equity Associates, L.C., a Florida limited liability company. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of
$3,200,000. Included as part of this purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000 due to the write-off of
unamortized loan costs and mortgage discount for the year ended December 31,
1996.
During 1996 the Partnership agreed to accept a payment of approximately $78,000
in 1997 as full satisfaction of the two notes receivable on Governour's Square.
The outstanding balances for these two notes receivable totaled approximately
$296,000, including accrued interest, and were fully reserved. Governour's
Square sold its sole operating property and the majority of the sales proceeds
were used to pay off the first mortgage.
The Partnership holds five notes receivable at December 31, 1997, totaling
approximately $1,422,000 with approximately $1,638,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,282,000 of deferred interest revenue.
Additionally, these five notes are due from related partnerships. These five
promissory notes are unsecured by the related partnerships and are subordinated
to the underlying mortgages of the respective partnerships. One note in the
amount of approximately $413,000 with accrued interest due in the amount of
approximately $267,000, the "Catawba Club Note" matured November 1, 1997. A
second note in the amount of approximately $399,000 with accrued interest due in
the amount of approximately $258,000, the "Tall Oaks Note" also matured November
1, 1997. A third note in the amount of approximately $455,000 with accrued
interest due in the amount of approximately $301,000, the "Quail Run Note,"
matured June 1, 1997. A fourth note in the amount of $70,000 with accrued
interest due in the amount of approximately $436,000, the "Highridge Note,"
matured May 1, 1996. All four of these notes were in default at December 31,
1997. The fifth note in the amount of $86,000 with accrued interest due in the
amount of approximately $376,000, the "Woodlawn Village Note", matured January
1, 1998 and was in default at that time. The Partnership is currently seeking
to receive full payment and resolution on each of these notes. Payments on
these notes are restricted to excess cash flow after payment of the first and
second mortgages and are dependent on excess cash flow from the properties or
sales proceeds. No payments were received in 1997 or 1996.
No distributions were made during the year ended December 31, 1997. During the
year ended December 31, 1996, a distribution of approximately $917,000 and
$9,000 was paid to the limited partners and general partner, respectively, in
connection with the sale of La Plaza. Future cash distributions will depend on
the levels of net cash generated from the collection of notes receivable and the
availability of cash reserves.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems.
Other
Certain items discussed in this annual report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this annual report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
ITEM 7. FINANCIAL STATEMENTS
JACQUES-MILLER INCOME FUND, L.P. II
LIST OF CONSOLIDATED FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet--December 31, 1997
Consolidated Statements of Operations--Years ended December 31, 1997 and 1996
Consolidated Statements of Changes in Partners' Capital (Deficit)--Years ended
December 31, 1997 and 1996
Consolidated Statements of Cash Flows--Years ended December 31, 1997 and 1996
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Jacques-Miller Income Fund, L.P. II
We have audited the accompanying consolidated balance sheet of Jacques-Miller
Income Fund, L.P. II (A Limited Partnership) as of December 31, 1997, and the
related consolidated statements of operations, changes in partners' capital
(deficit) and cash flows for each of the two years in the period ended December
31, 1997. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Jacques-Miller Income Fund, L.P. II (A Limited Partnership) at December 31,
1997, and the consolidated results of its operations and its cash flows for each
of the two years in the period ended December 31, 1997, in conformity with
generally accepted accounting principles.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
February 25, 1998
JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1997
Assets
Cash and cash equivalents $ 789
Notes receivable (net of allowance of
approximately $3,060) (Note B) --
Interest receivable 1
$ 790
Liabilities and Partners' Capital (Deficit)
Liabilities
Other liabilities $ 14
Partners' Capital (Deficit)
General partner's $ (106)
Limited partners' (12,400
units issued and outstanding) 882 776
$ 790
See Accompanying Notes to Consolidated Financial Statements
JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1997 1996
Revenues:
Rental income $ -- $ 290
Other income 37 140
Gain on sale of property -- 1,348
Total revenues 37 1,778
Expenses:
Operating -- 203
General and administrative 53 44
Interest -- 73
Property taxes -- 24
Total expenses 53 344
(Loss) income before extraordinary item (16) 1,434
Extraordinary loss on
early extinguishment of debt -- (221)
Net (loss) income $ (16) $ 1,213
Net (loss) income allocated to general partner (1%) $ -- $ 12
Net (loss) income allocated to limited partners (99%) (16) 1,201
$ (16) $ 1,213
Per limited partnership unit:
(Loss) income before extraordinary item $ (1.29) $114.52
Extraordinary loss on
early extinguishment of debt -- (17.63)
Net (loss) income per limited partnership unit $ (1.29) $ 96.89
See Accompanying Notes to Consolidated Financial Statements
JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 1995 12,400 $(109) $ 614 $ 505
Net income for the year
ended December 31, 1996 -- 12 1,201 1,213
Distributions -- (9) (917) (926)
Partners' (deficit) capital
at December 31, 1996 12,400 (106) 898 792
Net loss for the year ended
December 31, 1997 -- -- (16) (16)
Partners' (deficit) capital at
December 31, 1997 12,400 $(106) $ 882 $ 776
See Accompanying Notes to Consolidated Financial Statements
JACQUES-MILLER INCOME FUND, L.P. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1997 1996
Cash flows from operating activities:
Net (loss) income $ (16) $ 1,213
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Amortization of discounts and loan costs -- 13
Gain on sale of property -- (1,348)
Extraordinary item - loss on early
extinguishment of debt -- 221
Change in accounts:
Receivables and other assets -- 54
Interest receivable (1) --
Note receivable 78 (78)
Accounts payable -- (38)
Tenant security deposit liabilities -- 2
Other liabilities (8) 33
Net cash provided by operating activities 53 72
Cash flows from investing activities:
Property improvements and replacements -- (13)
Receipts from restricted escrows -- 111
Proceeds from sale of investment property -- 927
Net cash provided by investing activities -- 1,025
Cash flows from financing activities:
Payments on mortgage notes payable -- (21)
Distributions -- (926)
Net cash used in financing activities -- (947)
Net increase in cash and cash equivalents 53 150
Cash and cash equivalents at beginning of year 736 586
Cash and cash equivalents at end of year $ 789 $ 736
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ 67
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY
Notes Receivable
Notes receivable were adjusted approximately $252,000 and $166,000 at December
31, 1997 and 1996, respectively, for non-cash amounts in connection with accrued
interest on the notes receivable. These amounts were fully reserved.
Mortgage Note Payable
Mortgage note payable was adjusted approximately $1,984,000 at December 31, 1996
for a non-cash amount in connection with the assumption of mortgage debt related
to the sale of La Plaza Apartments.
See Accompanying Notes to Consolidated Financial Statements
JACQUES-MILLER INCOME FUND, L.P. II
Notes to Consolidated Financial Statements
December 31, 1997
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization: Jacques-Miller Income Fund, L.P. II (the "Partnership") is a
Delaware limited partnership organized in July 1985 to make long-term junior
mortgage loans, including wraparound mortgage loans and, to a lesser extent,
other mortgage loans including first mortgage loans primarily to affiliated
public and private real estate limited partnerships. The Partnership currently
holds five notes receivable.
Principles of Consolidation: The consolidated financial statements include all
the accounts of the Partnership and its one 99.9% owned partnership. All
significant interpartnership balances have been eliminated.
Use of Estimates: The preparation of consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.
Allocations to Partners: Net income (loss) of the Partnership and taxable
income (loss) are allocated 99% to the limited partners and 1% to the general
partner. Distributions of available cash, as defined by the partnership
agreement, are allocated among the limited partners and the general partner in
accordance with the agreement of limited partnership.
Cash and Cash Equivalents: Includes cash on hand and in banks, certificates of
deposit, and money market funds with original maturities less than 90 days. At
certain times, the amount of cash deposited at a bank may exceed the limit on
insured deposits.
Deferred Revenue: Deferred revenue results from accrued but unpaid interest
receivable, realization of which is dependent upon appreciation of the property
which collateralizes the receivable. The net interest revenue is recognized
when collectibility is assured.
Leases: The Partnership generally leased apartment units for twelve-month terms
or less. The Partnership recognized income as earned on its leases.
Investment Properties: Investment properties are stated at cost. Acquisition
fees are capitalized as a cost of real estate. The Partnership records
impairment losses on long-lived assets used in operations when events and
circumstances indicate that the assets might be impaired and the undiscounted
cash flows estimated to be generated by those assets are less than the carrying
amounts of those assets.
Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising expense, included in operating expense, was approximately $3,000 for
the year ended December 31, 1996. There was no advertising expense in 1997.
Fair Value of Financial Instruments: The Partnership believes that the carrying
amount of its financial instruments approximates their fair value due to the
short term maturity of these instruments. Management of the Partnership believes
that the carrying amount of the notes receivable approximates their fair value.
Reclassifications: Certain reclassifications have been made to the 1996
information to conform to the 1997 presentation.
NOTE B - NOTES RECEIVABLE
Notes receivable consist of (in thousands):
December 31,
1997
Notes receivable $ 1,422
Accrued interest receivable on
notes receivable 1,638
3,060
Provision for uncollectibles
(including approximately $1,282,000
of deferred interest revenue) (3,060)
$ --
The Partnership holds five notes receivable at December 31, 1997, totaling
approximately $1,422,000 with approximately $1,638,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectibles is approximately $1,282,000 of deferred interest revenue.
Additionally, these five notes are due from related partnerships. These five
promissory notes bear interest at rates ranging from 11% to 12.5%, and are
unsecured by the related partnerships and are subordinated to the underlying
mortgages of the respective partnerships.
During 1996, the Partnership agreed to accept a payment of approximately $78,000
in 1997 as full satisfaction of the two notes receivable on Governour's Square.
The outstanding balances for these two notes receivable totaled approximately
$296,000, including accrued interest, and were fully reserved. Governour's
Square sold its sole operating property and the majority of the sales proceeds
were used to pay off the first mortgage. Income was recorded as a result of the
reduction in the allowance on the notes and is included in other income on the
1996 statement of operations.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $267,000, the "Catawba Club Note" matured November
1, 1997. A second note in the amount of approximately $399,000 with accrued
interest due in the amount of approximately $258,000, the "Tall Oaks Note" also
matured November 1, 1997. A third note in the amount of approximately $455,000
with accrued interest due in the amount of approximately $301,000, the "Quail
Run Note," matured June 1, 1997. A fourth note in the amount of $70,000 with
accrued interest due in the amount of approximately $436,000, the "Highridge
Note," matured May 1, 1996. All four of these notes were in default at December
31, 1997. The fifth note in the amount of $86,000 with accrued interest due in
the amount of approximately $376,000, the "Woodlawn Village Note", matured
January 1, 1998 and was in default at that time. The Partnership is currently
seeking to receive full payment and resolution on each of these notes. Payments
on these notes are restricted to excess cash flow after payment of the first and
second mortgages and are dependent on excess cash flow from the properties or
sales proceeds. No payments were received in 1997 or 1996.
NOTE C - SALE OF LA PLAZA
On May 24, 1996, Jacques-Miller Income Fund II Special Asset Partnership (La
Plaza) L.P., which is 99.9% owned by the Partnership, sold La Plaza Apartments,
located in Altamonte Springs, Florida, to an unaffiliated purchaser, Wymore
Equity Associates, L.C., a Florida limited liability company. Wymore Equity
Associates, L.C. purchased La Plaza Apartments for a contract price of
$3,200,000. Included as part of this purchase price is the assumption of
approximately $1,984,000 in first and second mortgage debt. The Partnership
received net proceeds of approximately $927,000 after payment of closing costs.
This disposition resulted in a gain of approximately $1,348,000 and a loss on
early extinguishment of debt of approximately $221,000 due to the write-off of
unamortized loan costs and mortgage discount for the year ended December 31,
1996.
Revenues and expenses from La Plaza were approximately $328,000 and $299,000,
respectively, in 1996.
NOTE D - INCOME TAXES
The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for federal income tax purposes.
Accordingly, no provision for income taxes is made in the financial statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.
The following is a reconciliation of reported net (loss) income and Federal
taxable (loss) income (in thousands, except unit data):
1997 1996
Net (loss) income as reported $ (16) $ 1,213
Add (deduct):
Depreciation differences -- (44)
Bad debt -- (194)
Disposal of property -- (39)
Other (15) 4
Federal taxable (loss) income $ (31) $ 940
Federal taxable (loss) income
per limited partnership unit $ (2.48) $ 75.07
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net assets as reported $ 776
Allowance for doubtful accounts 1,778
Other 7
Net assets - Federal tax basis $2,561
NOTE E - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has outstanding notes receivable in the amount of approximately
$1,422,000 with affiliated partnerships at December 31, 1997. During 1996, the
Partnership agreed to accept a payment of approximately $78,000 in 1997 in full
satisfaction of the two notes receivable on Governour's Square. The outstanding
balances for these two notes receivable totaled approximately $296,000,
including accrued interest, and were fully reserved.
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, Inc. ("Insignia") acquired substantially all of the assets of
Jacques-Miller, Inc. (the General Partner Interest of the Registrant) including
Jacques-Miller's property management organization. However, the General Partner
Interest of the Registrant was not acquired during this transaction. As a
result of a separate Advisory Agreement between the Registrant and IFGP
Corporation (an affiliate of Insignia) Insignia and its affiliates succeeded to
those asset management and property management duties previously performed by
Jacques-Miller.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The General Partner of the Registrant is:
Jacques-Miller, Inc., a Tennessee Corporation
Jacques-Miller, Inc., the Managing General Partner, was formed under the laws of
the State of Tennessee in 1972.
The principal executive officer and director of the Managing General Partner is:
Name Age Position
C. David Griffin 51 President, Chief Operating Officer
and Director
Biographies
C. David Griffin. Mr. Griffin became President and Chief Operating Officer of
Jacques-Miller, Inc. in August 1987. He is an officer and director of Jacques-
Miller Property Management, Inc. and several other wholly owned subsidiaries of
Jacques-Miller, Inc., all of which render ancillary services to the partnerships
sponsored by the General Partner.
Balanced Holding Partners, L.P. Transaction
In December of 1989, Balanced Holdings Partners, L.P., a Delaware limited
partnership ("BHP"), purchased from Jacques-Miller, Inc. and certain of its
subsidiaries ("Jacques-Miller") certain real estate assets, which included,
among other things, the General Partner's economic benefits and economic rights
in Jacques-Miller sponsored limited partnerships, including the Registrant.
Jacques-Miller remained as the General Partner, but was indemnified by BHP to
the full extent of BHP's assets up to a maximum aggregate amount of $2,000,000
of which approximately all has been utilized.
As the General Partner, Jacques-Miller itself remains liable for the recourse
obligations of the Registrant to the extent that the Registrant's cash flow and
assets become insufficient to meet Registrant's obligations, and could be
required to make payments on behalf of the Registrant in such events.
As the General Partner, Jacques-Miller receives a residual interest in the
proceeds of the disposition of Registrant's assets, typically computed as a
percentage of net proceeds from the sale or refinancing of partnership assets
and subordinated to the recovery by the limited partners of their investments
plus a specified cumulative annual return. Jacques-Miller effectively sold all
of its residual interest to BHP in connection with this transaction.
Insignia Transaction
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, Inc. ("Insignia") acquired substantially all of the assets of
Jacques-Miller, Inc. (the General Partner Interest of the Registrant) including
Jacques-Miller's property management organization. However, the General Partner
Interest of the Registrant was not acquired during this transaction. As a
result of a separate Advisory Agreement between the Registrant and IFGP
Corporation (an affiliate of Insignia) Insignia and its affiliates succeeded to
those asset management and property management duties previously performed by
Jacques-Miller.
ITEM 10. EXECUTIVE COMPENSATION
The Registrant was not required to and did not pay remuneration to officers
and/or directors of the Managing General Partner during 1997 or 1996.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No person or group is known by the Registrant to own beneficially more than 5%
of the outstanding Interests of the Registrant, as of December 31, 1997.
No officer or director of the General Partner of the Registrant owns, nor do the
officers or directors as a group own, any of the Registrant's Interests as of
December 31, 1997. No officer or director of the General Partner possesses a
right to acquire beneficial ownership of Interests of the Registrant.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has outstanding notes receivable in the amount of approximately
$1,422,000 with affiliated partnerships at December 31, 1997. During 1996, the
Partnership agreed to accept a payment of approximately $78,000 in 1997 in full
satisfaction of the two notes receivable on Governour's Square. The outstanding
balances for these two notes receivable totaled approximately $296,000,
including accrued interest, and were fully reserved.
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
(b) Reports on Form 8-K filed in the fourth quarter of fiscal year 1997:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JACQUES-MILLER INCOME FUND, L.P. II
By: Jacques-Miller, Inc.
Corporate General Partner
BY: /s/C. David Griffin
C. David Griffin
President and Chief Operating
Officer
Date: March 20, 1998
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
/s/C. David Griffin President and Chief Operating
C. David Griffin Officer (Principal Executive Officer)
EXHIBIT INDEX
Exhibit
3 Partnership Agreement is incorporated by reference to Exhibit A of the
Prospectus contained in the Registrant's Registration Statement (2-99745)
as filed with the Commission pursuant to Rule 424(b) under the Act.
4 Form of Certificate representing interests in the Registrant. [Exhibit 4
to Registration Statement on Form S-11 dated October 16, 1985,
Registration Number 2-99745 is incorporated herein by reference.]
10A Promissory Note dated July 20, 1990 in the amount of $476,000.00 payable
to the Registrant executed by Balanced Holding Partners, L.P. [Filed as
Exhibit 10A to Form 10K for the year ended December 30, 1990, and
incorporated herein by reference.]
10B Settlement Agreement dated July 25, 1991 between Jacques-Miller Income
Fund L.P. II and Balanced Holdings Partners, L.P., Jacques-Miller, Inc.,
and Jacques-Miller Mortgage, Inc. of Tennessee. [Filed as Exhibit 10B to
Form 10K for the year ended December 31, 1991, and incorporated herein by
reference.]
10C Advisory Agreement, dated December 30, 1991, between Jacques-Miller
Income Fund L.P. II and Insignia GP Corporation. [Filed as Exhibit 10C
to Form 10K for the year ended December 31, 1991, and incorporated herein
by reference.]
10D Contracts related to refinancing of debt:
(a) First Mortgage and Security Agreement dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset Partnership (La Plaza),
L.P. and First Commonwealth Realty Credit Corporation, a Virginia
Corporation, securing La Plaza Apartments. *
(b) First Deed of Trust and Security Agreement dated October 28, 1992
between Jacques-Miller Income Fund II Special Asset Partnership
(Willow Oaks), L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing Willow Oaks
Apartments. *
(c) Second Mortgage and Security Agreement dated October 28, 1992
between Jacques-Miller Income Fund II Special Asset Partnership (La
Plaza), L.P. and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing La Plaza Apartments.
(d) Second Deed of Trust and Security Agreement dated October 28, 1992
between Jacques-Miller Income Fund II Special Asset Partnership
(Willow Oaks), L.P. and First Commonwealth Realty Credit
Corporation, a Virginia Corporation, securing Willow Oaks
Apartments. *
(e) First Assignment of Leases and Rents dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset Partnership (La Plaza),
L.P. and First Commonwealth Realty Credit Corporation, a Virginia
Corporation, securing La Plaza Apartments. *
(f) First Assignment of Leases and Rents dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset Partnership (Willow
Oaks), L.P. and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing Willow Oaks Apartments. *
(g) Second Assignment of Leases and Rents dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset Partnership (La Plaza),
L.P. and First Commonwealth Realty Credit Corporation, a Virginia
Corporation, securing La Plaza Apartments. *
(h) Second Assignment of Leases and Rents dated October 28, 1992 between
Jacques-Miller Income Fund II Special Asset Partnership (Willow
Oaks), L.P. and First Commonwealth Realty Credit Corporation, a
Virginia Corporation, securing Willow Oaks Apartments. *
(i) First Mortgage Note dated October 28, 1992 between Jacques-Miller
Income Fund II Special Asset Partnership (La Plaza), L.P. and First
Commonwealth Realty Credit Corporation, relating to La Plaza
Apartments. *
(j) First Deed of Trust Note dated October 28, 1992 between Jacques-
Miller Income Fund II Special Asset Partnership (Willow Oaks), L.P.
and First Commonwealth Realty Credit Corporation, relating to Willow
Oaks Apartments. *
(k) Second Mortgage Note dated October 28, 1992 between Jacques-Miller
Income Fund II Special Asset Partnership (La Plaza), L.P. and First
Commonwealth Realty Credit Corporation, relating to La Plaza
Apartments. *
(l) Second Deed of Trust Note dated October 28, 1992 between Jacques-
Miller Income Fund II Special Asset Partnership (Willow Oaks), L.P.
and First Commonwealth Realty Credit Corporation, relating to Willow
Oaks Apartments. *
* Filed as Exhibits 10D (a) through (l), respectively, to Form 10KSB for
the year ended December 31, 1992 and incorporated herein by reference.
21 Subsidiaries of the Registrant
27 Financial Data Schedule
99A Agreement of Limited Partnership for Jacques-Miller Income Fund II
Special Asset Partnership (La Plaza), L.P. between Jacques-Miller, Inc.
and Jacques-Miller Income Fund II, L.P. entered into August 21, 1991.
[Filed as Exhibit 28A to Form 10KSB for the year ended December 31,
1992, and incorporated herein by reference.]
99B Agreement of Limited Partnership for Jacques-Miller Income Fund II
Special Asset Partnership (Willow Oaks), L.P. between Jacques-Miller,
Inc. and Jacques-Miller Income Fund II, L.P. entered into December 16,
1991. [Filed as Exhibit 28B to Form 10KSB for the year ended December
31, 1992, and incorporated herein by reference.]
99C Agreement of Limited Partnership for Jacques-Miller Income Fund II
Special Asset Partnership (Brighton Way), L.P. between Jacques-Miller,
Inc. and Jacques-Miller Income Fund II, L.P. entered into December 16,
1991. [Filed as Exhibit 28C to Form 10KSB for the year ended December
31, 1992, and incorporated herein by reference.]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Jacques
Miller Income Fund, L.P. II 1997 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000774655
<NAME> JACQUES MILLER INCOME FUND, L.P. II
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 789
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 790
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 776
<TOTAL-LIABILITY-AND-EQUITY> 790
<SALES> 0
<TOTAL-REVENUES> 37
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 53
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16)
<EPS-PRIMARY> (1.29)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
